Investment Ideas


Build a Strong Low-Cost Core Portfolio


A Stable Foundation


A strong flexible portfolio begins with the core. It provides a stable foundation to pursue specific investment goals—from managing risk and generating income to growing capital through diversification.

But core investing shouldn’t be costly. Instead, investors should have confidence that they aren’t overpaying for returns in the largest part of their portfolio.

The best core holdings offer:

  • Diversification ETFs usually track an index, so investors can get a basket of holdings in one simple trade 
  • Low cost ETFs generally have lower fees than mutual funds, making them ideal for a core portfolio
  • Liquidity ETFs trade daily on exchange, and have multiple layers of liquidity through the unique creation/redemption mechanism, enabling investors to get in and out of their investment whenever the market is open
  • Transparency Investors can see exactly what is included in an ETF on a daily basis
  • Tax efficiency Investors typically are taxed only upon selling an ETF investment, whereas mutual funds incur such burdens over the course of the investment 

These attributes may make ETFs an ideal core holding.


Meeting Investment Goals


The Leading Driver of Portfolio Returns

Asset allocation—the mix of stocks, bonds and cash in a portfolio—explains 90% of the variance in portfolio returns.1 Changing the weighting of these investments alter the risk profile of a portfolio, and therefore the potential return.

Allocate with Ease for Any Risk Appetite

With as few as three low-cost SPDR Portfolio ETFs, investors can easily build a diversified core portfolio of stocks and bonds. From conservative to aggressive allocations, the following five risk-based examples can be tailored to meet different investment objectives—each with a weighted-average cost just under 4 basis points (bps).


Get More For Less


It's simple: high costs erode returns. So the largest part of your portfolio should never be the most expensive. Every little basis point counts.

SPDR Portfolio ETFs are diversified and tax-efficient stock and bond index funds, available from as little as 3 bps. Covering US equity, international equity and fixed income asset classes, they are designed to help investors allocate for the long-term. They have a median cost 92% lower than the median US-listed mutual fund.2


22

SPDR Portfolio ETFs to choose from


6 bps

The median cost for SPDR Portfolio ETFs


92%

Lower than the median US-listed mutual fund 2



How to Invest


View Our Low Cost ETFs

See the full range of 22 low cost SPDR Portfolio ETFs, starting from just 3bps.

Four Principles of Core Construction

An effective core may differ from one investor to the next, but four construction principles apply to all.

Model Portfolios

Leave the asset allocation to us! SPDR ETFs have ready-made portfolios that include our low-cost range.

Footnotes

1 Gary P. Brinson, L. Randolph Hood, Gilbert L. Beebower, "Determinants of Portfolio Performance", Financial Analyst Journal Vol.42 Issue 4 1986.

2 Morningstar, State Street Global Advisors, as of 08/31/2019. The median expense ratio of the 22 SPDR Portfolio ETFs is 6 basis points. Based on their Morningstar category, the 22 SPDR Portfolio ETFs have an median expense ratio that's 92% less than the median expense ratio of all US-listed mutual funds, which include both active and passive products, of 76 basis points.

Disclosures

Important Risk Information

Risk associated with equity investing includes stock values which may fluctuate in response to the activities of individual companies and general market and economic conditions.

Non-diversified funds that focus on a relatively small number of securities tend to be more volatile than diversified funds and the market as a whole.

Investments in small-sized companies may involve greater risks than in those of larger, better known companies. Returns on investments in stocks of small companies could trail the returns on investments in stocks of larger companies.

Foreign investments involve greater risks than US investments, including political and economic risks and the risk of currency fluctuations, all of which may be magnified in emerging markets.

Bond funds contain interest rate risk (as interest rates rise bond prices usually fall); the risk of issuer default; issuer credit risk; liquidity risk; and inflation risk.

Returns on investments in stocks of large US companies could trail the returns on investments in stocks of smaller and mid-sized companies.

The values of debt securities may decrease as a result of many factors, including, by way of example, general market fluctuations; increases in interest rates; actual or perceived inability or unwillingness of issuers, guarantors or liquidity providers to make scheduled principal or interest payments; illiquidity in debt securities markets; and prepayments of principal, which often must be reinvested in obligations paying interest at lower rates.

Frequent trading of ETFs could significantly increase commissions and other costs such that they may offset any savings from low fees or costs.